Project Description 2007-12-15 · 2014. 6. 4. · 2007 Mine Production Application And Project Description (revised) Prepared for: CMC Metals Ltd Prepared by: ... 4.1.3 Open Pit and

Silver Hart Property 2007 Mine Production Application

And Project Description (revised)

Prepared for:

CMC Metals Ltd

Prepared by: Access Consulting Group

December 2007

CMC Metals Ltd. – Project Proposal and YESAA Application Silver Hart Property

Access Consulting Group, December 2007 i

TABLE OF CONTENTS

1.0 CORPORATE PROFILE............................................................................1 2.0 PROJECT BACKGROUND.......................................................................3

2.1 PROJECT LOCATION AND HISTORY ......................................................................3 2.2 GEOLOGY ...........................................................................................................5

2.2.1 Regional Geology ...................................................................................................... 5 2.2.2 Property Geology ....................................................................................................... 6 2.2.3 Deposit Geology and Mineralization .......................................................................... 6

2.3 CURRENT SITE CONDITIONS ................................................................................8 3.0 PROJECT SCOPE.....................................................................................9

3.1 ENVIRONMENTAL ASSESSMENT AND REGULATORY APPROVALS ..........................9 3.2 PROJECT ACTIVITIES.........................................................................................10 3.3 PROJECT SCHEDULE.........................................................................................10 3.4 ADDITIONAL REPORTS AND PLANS....................................................................12

4.0 SUMMARY OF PROPOSED DEVELOPMENT .......................................13 4.1 MINING .............................................................................................................13

4.1.1 Prestrip Organics ..................................................................................................... 13 4.1.2 Overburden Stripping............................................................................................... 18 4.1.3 Open Pit and Underground Development Program................................................. 19 4.1.4 Ore Extraction .......................................................................................................... 19 4.1.5 Technical Data for Proposed Mining Methods......................................................... 21

4.2 WASTE MANAGEMENT ......................................................................................23 4.2.1 Waste Rock Management ....................................................................................... 23 4.2.2 Camp Waste ............................................................................................................ 26 4.2.3 Contaminated Soils.................................................................................................. 26

4.3 MILL OPERATIONS AND TAILINGS MANAGEMENT ...............................................26 4.3.1 Mill Operations ......................................................................................................... 26 4.3.2 Materials Balance .................................................................................................... 31 4.3.3 Personnel................................................................................................................. 31 4.3.4 Tailings Management............................................................................................... 34

4.4 SUMMARY OF PROJECT WATER USE AND WATER MANAGEMENT .......................37 4.4.1 Water Use ................................................................................................................ 37 4.4.2 Spillways .................................................................................................................. 40 4.4.3 Diversion Channels.................................................................................................. 40 4.4.4 Sediment Control ..................................................................................................... 40 4.4.5 Mine Dewatering ...................................................................................................... 40 4.4.6 Water Disposal......................................................................................................... 41

4.5 FACILITIES ........................................................................................................41 4.5.1 Temporary Camp..................................................................................................... 41 4.5.2 Mill Site Camp Infrastructure ................................................................................... 42 4.5.3 Mill and Ancillary Facilities....................................................................................... 42 4.5.4 Fuel Storage ............................................................................................................ 42 4.5.5 Emergency Spill Response Plan ............................................................................. 43

4.6 PROPERTY ACCESS AND SECURITY ...................................................................43 5.0 CHARACTERIZATION OF THE ENVIRONMENT...................................44

5.1 TERRESTRIAL ENVIRONMENT ............................................................................44 5.1.1 Acid Rock Drainage and Metals Leachate............................................................... 44

5.1.4.2 Initial Phase ML/ARD Assessment: Geological Sampling ............................................45 5.1.4.2 Analytical Results .........................................................................................................45

5.1.2 Topography and Soils .............................................................................................. 45


Access Consulting Group, December 2007 ii

5.1.3 Vegetation................................................................................................................ 46 5.1.4.2 Closed Alpine Fir ..........................................................................................................46 5.1.4.2 Open Alpine Fir.............................................................................................................48 5.1.4.2 Dwarf Alpine Fir ............................................................................................................48 5.1.4.2 Alpine Shrub .................................................................................................................48 5.1.4.2 Vegetation Densities.....................................................................................................48 5.1.4.2 Vascular Plant Species.................................................................................................49

5.1.4 Wildlife ..................................................................................................................... 49 5.2 AQUATIC ENVIRONMENT....................................................................................53

5.2.1 Site Hydrology.......................................................................................................... 53 5.2.2 Surface Water Quality.............................................................................................. 54 5.2.3 Hydrogeology........................................................................................................... 55 5.2.4 Fishery Investigations .............................................................................................. 56

5.2.4.2 Fishery Investigations ...................................................................................................56 5.2.4.2 Methods........................................................................................................................56 5.2.4.2 Fish Sampling Results ..................................................................................................57 5.2.4.2 Discussion and Recommendations ..............................................................................57

5.2.5 Stream Sediments ................................................................................................... 58 5.3 ATMOSPHERIC ENVIRONMENT ...........................................................................59

5.3.1 Climate..................................................................................................................... 59 5.4 HUMAN ENVIRONMENT ......................................................................................59

5.4.1 Land Use and Land Tenure ..................................................................................... 59 5.4.2 Heritage Resources and Archaeology..................................................................... 60 5.4.3 Socioeconomic Conditions ...................................................................................... 62

6.0 CONSULTATION.....................................................................................64 7.0 POTENTIAL ENVIRONMENTAL AND SOCIOECONOMIC EFFECTS AND PROPOSED MITIGATION.........................................................................65

7.1 SUMMARY OF POTENTIAL ENVIRONMENTAL AND SOCIOECONOMIC EFFECTS ......65 7.2 SUMMARY OF POTENTIAL ENVIRONMENTAL AND SOCIOECONOMIC EFFECTS AND PROPOSED MITIGATION ................................................................................................67

7.2.1 Terrestrial Environment............................................................................................ 68 7.2.2 Wildlife ..................................................................................................................... 68 7.2.3 Aquatic Environment................................................................................................ 69 7.2.4 Atmospheric Environment........................................................................................ 70 7.2.5 Decommissioning..................................................................................................... 70 7.2.6 Post Closure Management ...................................................................................... 72

7.3 CUMULATIVE ENVIRONMENTAL EFFECTS ...........................................................73 7.4 PREVIOUS ENVIRONMENTAL ASSESSMENTS ......................................................74 7.5 ENVIRONMENTAL MONITORING PLANS...............................................................75

8.0 REFERENCES.........................................................................................76 9.0 LIMITATIONS AND ACKNOWLEDGEMENTS/CLOSURE.....................78


Access Consulting Group, December 2007 iii

LIST OF TABLES

Table 1 Overburden Material Placement - Volume in Bank Cubic Meters (bcm) .................. 18

Table 2 Surface Mine Criteria ..................................................................................................... 21

Table 3 Underground Mine Criteria............................................................................................ 23

Table 4 Waste Rock Site Design Criteria .................................................................................. 24

Table 5 Milling Reagents and Conditioners - Concentration (gm.tonne) .............................. 29

Table 6 Manpower Requirements .............................................................................................. 32

Table 7 Tailings Pond Design Criteria ....................................................................................... 35

Table 8 Water Consumption (m3/day) ........................................................................................ 37

Table 9 Average Precipitation .................................................................................................... 38

Table 10 Daily Precipitation Extremes ...................................................................................... 39

Table 11 Vegetation Types ......................................................................................................... 49

Table 12 Environmental Monitoring Stations ........................................................................... 55

Table 13 Significance of Impacts ............................................................................................... 66


Access Consulting Group, December 2007 iv

LIST OF FIGURES

Figure 1 General Location Map...................................................................................................... 2

Figure 2 Area Overview.................................................................................................................. 4

Figure 3 Site Overview ................................................................................................................. 11

Figure 4-1: TM Pit Plan Overburden Removal .............................................................................. 14

Figure 4-2: TM Pit Plan Overburden Removal .............................................................................. 15

Figure 4-3: TM Pit Plan Final Pit Plan ........................................................................................... 16

Figure 4-4: TM Pit Plan Underground Development Workings ..................................................... 17

Figure 5: Site Layout ..................................................................................................................... 22

Figure 6: Waste Site Design.......................................................................................................... 25

Figure 7 Crusher Circuit Layout.................................................................................................... 28

Figure 8 Mill Flow Diagram........................................................................................................... 30

Figure 9 Mill Materials Balance .................................................................................................... 33

Figure 10 Tailings Berm Cross Section........................................................................................ 36

Figure 11 Silver Hart Property Vegetation.................................................................................... 47

Figure 12 Key Wildlife Areas and Game Management Zones ..................................................... 51

Figure 13 Moose Post-Rut Survey Results .................................................................................. 52

Figure 14 Land Use ...................................................................................................................... 61

LIST OF APPENDICES

Appendix A Emergency Spill Response Plan

Appendix B Acid Rock Drainage and Metals Leachate Testing Results

Appendix C Vegetation Survey Results

Appendix D Moose and Caribou Post-Rut Survey

Appendix E Water and Sediment Quality Testing Results

Appendix F Heritage Assessment

Appendix G Klohn Leonoff Geotechnical Study (1987)

Appendix H Silver Hart Weather Station Summary

Appendix I Project Timeline

Appendix J Yukon Water Board Information Sheet


Access Consulting Group, December 2007 1

1.0 Corporate Profile

CMC Metals Ltd. (CMC) is a public mining company trading on the TSX Venture Stock

Exchange, and is focused on the development of advance staged mineral properties.

CMC searches for high grade precious and base metal properties that are sufficient in

size to meet their economic criteria plus demonstrate the ability to minimize

environmental foot print. For a property to be considered for development, the property

must be sustainable financially, environmentally, and socially. Currently CMC has four

properties that are being evaluated for development - three are located in the Yukon

Territory (see Figure 1). For more information see www.cmcmetals.ca.

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Mayo Lake

Drury Lake

Wolf Lake

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Destruction Bay

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Stewart Crossing

Johnson's Crossing

Watson Lake

Burwash Landing

Nisling River

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Teslin River

Stewart River

Teslin Lake

Kluane Lake

Marsh Lake

Alsek River

Kusawa Lake

Aishihik LakeFrances Lake

Blackstone R

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Little Salmon Lake

Mayo Lake

Drury Lake

Wolf Lake

Quiet Lake

Lake Lebarge

Old Crow River

Eagle River

Firth Rive

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Wind Ri ver

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Sixty M

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Porcupine River

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Donjek River

Kluane R

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MacMil lan River

McQu esten River

Beaver River

S t ewart Rive

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Liard RiverNisu t lin Riv er

Yukon Riv er

Yukon River

Stewart River

Dezadeash Lake

Hyland R

iver

ElsaKeno

Mayo

Faro

Dawson

TagishTeslin

Old Crow

Carmacks

Carcross

Ross River

Whitehorse

Eagle Plains

Beaver Creek

Pelly Crossing

Destruction Bay

Haines Junction

Stewart Crossing

Johnson's Crossing

Watson Lake

Burwash Landing

Nisling River

50 0 50 100 150 200 250 300kmScale 1 : 6 000 000

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Yukon Territory

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Figure 1

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Project Location



2.0 Project Background

2.1 Project Location and History

The CMC Silver Property, also known as the Silver Hart Property, is located in south

central Yukon between the Meister River and the Oake Lake/Oake Creek watersheds.

The property is located near the headwaters of the Rancheria River but outside of this

watershed (see Figures 1 and 2).

The Silver Hart Property is a previously discovered precious metals deposit that has

seen a number of advanced exploration programs since it was initially discovered. The

deposit is a silver, lead, and zinc mineralization, with minor values of tungsten, copper

and molybdenum. Documents indicate that the area was first staked as early as 1947

(Bastille Claims owned by Great Northern ECL) but there are no records of any work

being undertaken until the area was re-staked in 1971 by Wolf Lake Joint Venture.

Following this re-staking some test pits and mapping was undertaken. The area was

once again re-staked in 1980 and named the CMC claims. In 1981 the claims were

acquired by McCrory Holdings (Yukon) Ltd., after which more test pits were dug and

rock-chip samples obtained. These samples indicated high levels of silver, lead, and

zinc. In 1982 the CMC claims were optioned by BRX Mining and Petroleum Ltd. who

carried out an airborne geophysical survey, ground VLF/EM and drilled 196.9 m in two

holes. T. McCrory and B. Preston discovered two additional zones of silver-lead-zinc

mineralization in 1983 and 1984. Analyses from one of the zones attracted the interest

of Shakwak Exploration Company Limited and Silver Hart Mines Ltd. A 1985 exploration

program focused on testing the continuity along strike and down dip of the silver-lead-

zinc veins in the two surface zones, zone F and T. The program included surface

geological mapping, preliminary grid geophysical (VLF) and geochemical surveys,

bulldozer trenching, as well as the completion of 50 diamond drill holes. During the

winter of 1985-86, underground exploration was conducted in the T zone, just above an

elevation of 4,600 feet (1402 m). Trackless mining methods were used with openings on

haulages of approximately 12-16 ft (3.6-4.9 m) wide by 10 ft (3 m) high. Slusher drifts

and raises were approximately 5 ft (1.5 m) wide by 7 ft (2.1 m) high. Approximately

2,208 ft (673 m) of openings were driven.

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M O U N T A I N S

Area Overview

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CMC METALS LTD.PROPERTYScale:

NOTES:

Projection: UTM Zone 9 NAD83Units: MetersNTS: 105B/02 and 105B/07

National Topographic Data Base (NTDB) compiled by Natural Resources Canada at a scale of 1:50,000. Cadastral data compiled by Natural Resources Canada. Reproduced under license from © Her Majesty the Queen in Right of Canada, Department of Natural Resources Canada. All rights reserved.

Quartz claim data obtained from Yukon Government Minerals Branch via http://www.geomaticsyukon.ca/data_download. Data current as of September 15, 2006.

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Figure 2

Other Quartz ClaimsWater Body



In 2005 CMC bought the property and conducted a due diligence exploration program to

confirm the past geological data. Recently in 2006 and 2007, CMC continued to gather

additional information by way of diamond drilling, trenching and geochemical surveys.

Reclamation of past site operators camp facilities, closure of the adit opening and

upgrading of the access road on the claims also occurred during this time.

2.2 Geology

2.2.1 Regional Geology

The Silver Hart Property lies within the Omineca physiographic belt of the Yukon

Territory. The property is a part of the Rancheria District of northeastern BC and

southeastern Yukon that contains numerous silver-rich vein and replacement style

deposits. The general underlying geology is described as Paleozoic sedimentary rocks

of the Cassiar Platform on the east, in contact with Cretaceous Plutonic rocks of the

Cassiar Batholith to the west. The overall trend of the contact is roughly northwest, as is

the trend of the Cassiar Fault to the west. The Cretaceous Cassiar Batholith, Marker

Lake Batholith, and Meister Lake Stock are predominantly granite, but range in

composition from quartz diorite, through trontjemite, granodiorite, to quartz monzonite.

The Paleozoic sediments consist of interbedded wakes, arenites, quartz arenites

(quartzite), and derived metamorphosed equivalents, such as mica schists,

quartzofeldspathic gneisses, schists and quartzite (Amukum and Lowey, 1986).

The mafic and felsic dykes are considered to be spatially and temporally associated with

late Cretaceous and early Tertiary faults and mineralization (Amukum and Lowey, 1986).

Green “andesite” dykes are found throughout the mineral district and appear to be

related to faulting that hosts silver-bearing veins (Read, 1987). The dominant structural

features of the area are large regionally continuous, northwest-trending, transcurrent

faults that are likely superimposed on the major regional faults, and considered to

postdate arc-continent collision of early Mesozoic time (Tempelman-Kluit, 1979).



2.2.2 Property Geology

The Silver Hart Property covers a portion of the contact zone between the Cretaceous

Cassiar Batholith and Lower Cambrian Atan Group sediments of the Cassiar Platform.

Sediments are unsubdivided carbonate rocks and interbedded quartz rich clastic rocks

with derived schists and gneisses. Amukum and Lowey (1986), and Read (1987),

describe the Silver Hart Property Geology as follows:

The northwest-trending contact of the granodiorite of the Cassiar Batholith to

the west, with metasediments to the east, is very irregular. Some contacts may

be intrusive, but many are fault-related. However, faults trending northeast (grid

north) appear to contain blocks of metasediments in a graben-like configuration.

As indicated by the limestone beds, the remnant bedding of the sediments

strikes obliquely across the mine grid in approximately a true north direction and

dips to the east. It is displaced across the No.1 Vein system with an apparent

left-hand movement, which more likely is a dip displacement across a normal

fault. This is supported by 1985 drill holes through the fault, and K Zone deeper

holes drilling into granodiorite in the footwall.

2.2.3 Deposit Geology and Mineralization

The Silver Hart Property is a vein hosted Ag-Zn-Pb+/-Cu mineral system. Although

there is evidence for skarn mineralization in the Silver Hart Property area, the dominant

mineral occurrences are of the low sulphidation epithermal type. Lindgren (1933) has

classified a number of precious metal, base metal, mercury, and stibnite deposits as

epithermal deposits and suggests they formed from the discharge of hydrothermal fluids

from a magmatic source at low temperatures (<200°C). However, a more generally

accepted classification of an epithermal deposit is a precious metal deposit, which forms

from meteoric waters with temperatures between 200°C and 300°C (Sillitoe, 1987).

White and Hedenquist (1990) note that epithermal deposits are found in a variety of

geological environments, in which the type of epithermal deposit is defined by various

combinations of igneous, tectonic and structural settings. On a worldwide scale, most

epithermal deposits occur in Tertiary volcanic rocks associated with subduction zones at

plate boundaries. They were once thought to occur exclusively in rocks that are Tertiary



in age but exploration and research has lead to the discovery of deposits in a variety of

magmatic environments. Older epithermal deposits are likely less common due to the

effects of erosion or metamorphism (Sillitoe, 1987). Sillitoe (1987) provides a brief

description of the similarities and differences of adularia-sericite (low sulphidation) type

or acid-sulphate (high sulphidation) type deposits:

The two types of deposits appear to form under similar pressure-temperature

conditions but in different geological and geochemical environments in ancient

geothermal systems. The acid-sulphate type deposit forms in root zones of

volcanic domes from acid waters that contain residual magmatic volatiles. The

adulariasericite type deposit forms in a geothermal system where surficial

waters mix with deeper, heated saline waters in a lateral flow regime, high

above and probably offset from a heat source at depth; neutral to weakly acidic,

alkali chloride waters are dominant.

The Silver Hart Property system exhibits silicification, propylitic, argillic and sericitic

alteration along with the presence of pyrite, chalcopyrite, base metal sulphides,

tetrahedrite and sulfosalts, which are commonly found in adularia-sericite type deposits.

The propylitic and sericitic alteration proximal to veins found on the Silver Hart Property

supports an adulariasericite type of deposit. (Smith, 1988).

Many descriptions of the mineralization at the CMC claims have been written, Smith

(1988) summarizes the mineralization on the Silver Hart Property as follows:

In general, the veins (T, F and S) all lie near the contact of the sedimentary

rocks and the Cassiar Batholith. To date only the T vein/fault is filled in part with

one of the andesite dykes. The veins all strike close to the same direction

where drilled and sampled, and wall rock alteration in the granitic rocks is

epithermal in style with replacement mineralization and manganese flooding in

the sedimentary host rocks. The mineralization is of the epithermal type. The

hanging wall alteration consists of varying degrees of claying proximal to the

vein, sericite as the next outer shell and finally weak to intense propylitic

alteration as the outer-most shell of alteration. A distinctive feature of this

alteration is the pervasive flooding of the hanging wall rock with manganese

wad such that the veined areas can be easily located during prospecting. In



areas of sedimentary rocks hosting the veins, there are very wide patches of

black gossan surrounding the vein and local replacement zones of sphalerite

and galena with low silver content.

The `T' vein strikes N55° to 60°E and dips from 40° to 80°NW. It consists of

intensely fractured, oxidized and silicified breccia of argillically altered

granodiorite, with at least 5 stages of quartz and/or sulfide filling in right lateral

shears. Metallic minerals present in the vein are: sphalerite, galena,

chalcopyrite, tetrahedrite (freibergite), pyrite, pyrargyrite, arsenopyrite, covellite,

chalcocite, smithsonite and hematite. Accessory minerals are; quartz, calcite,

dolomite, and manganese rich carbonates.

The `T zone from about sections 9900 to 9700 consists of a series of fault

splays all to the west (hanging wall) of the main fault. These splay faults contain

massive sulfides or grey quartz fillings. Based on cross-cutting relations there

are about 5 ages of filling with the youngest (most western) having the most

visible grey freibergite filling, and the next two older zones having the most

galena. The early quartz fillings and the quartz zones associated with the

galena all contain very fine grained grey sulfides similar to the silver bearing

quartz zone at the trench.

2.3 Current Site Conditions

The Silver Hart Property itself is centered on a low peak in the Cassiar Mountains

between the Caribou Lake and Meister River drainage to the north and the Edgar Lake

and Oake Creek drainage to the south and east, which subsequently drains north into

the Meister River (see Figure 2). The majority of the deposit, and the initial area to be

mined, is on the south facing slope within the Edgar Lake and Oake Creek drainage.

The deposit is located near or above tree line above the valley floors on either side.

Current planning has all mine infrastructure constructed above the valley bottom near

the tree line.



3.0 Project Scope

CMC is planning to develop an open pit mine and milling facilities at the Silver Hart

Property. The Silver Hart Property contains a high grade silver, lead, zinc deposit

located towards the center of the 21.7km2 CMC claim block, in south central Yukon, 132

km west of Watson Lake on the Alaska Highway (see Figure 2). The site is accessed

through an existing 43 km access road (see Figure 2). Current production plans are for

the mining of 63,213 tonnes in the area known as the TM zone and the off shoot S zone.

This is expected to provide approximately 3 years of production. Mining will be seasonal

at approximately 150 days per year and the 80 tonnes per day mill will be a year-round

milling operation. Exploration to better understand the reserves and determine the

potential of adjacent ore-bodies began in 2005 and continued in 2006 and 2007.

Historical and current drilling totals 7,963 m of diamond drilled core. Current plans are

for exploration to continue within the claim block to determine the potential for an

expansion of the operational life of the development.

3.1 Environmental Assessment and Regulatory Approvals

• YESAA Designated Office (DO) Screening;

Once the project has been screened under YESAA and the Designated Office project

specifics as described herein will require the following:

• Waters Act Type B Water Use Licence for the use of water for milling (< 100 tonnes per day is a Type B - Schedule 7 YWR); and

• Quartz Mining Licence for production;

Existing Approvals currently in place:

• Land Use Permit - minor road upgrading will be required (applied for as part of the Class III Exploration permit); and

• Mining Land Use Class III Exploration permit.



3.2 Project Activities

Principle activities:

• Mining and milling of ore;

• Open pit mine;

• Deposit of tailings;

• Waste rock storage;

• Use of water for milling and camp; and

• Ancillary facilities.

Temporal Scope:

• 4 month construction project;

• 3 year mining/milling; and

• 1 year closure.

• Total: 5 years.

Spatial Scope:

The spatial scope of the project is the upper Meister and Oake Creek drainages (see

Figure 3).

3.3 Project Schedule

Exploration is continuing on-site and more resources may be discovered during the

planned life of the mine. Should exploration indicate an increase in the viable resources

allowing for an increase or extension of the operation, any legislative requirements for

additional permits or approvals will be met. Appendix I contains an estimated timeline

for the permitting and development of the project.

Caribou Lake

Roy Lake

Edgar Lake

Beaver Creek

Oake

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McCrory Creek

Meister R iver

TM Pit

Facilities

Tailings Pond

Proposed WasteDump Area

CMC-U1

CMC-M1

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CMC-04

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CMC-02

CMC-01

CMC-07

CMC-U2

CMC-M2

CMC-11

CMC-WX

CMC-OC3CMC-OC2

CMC-03A

Landing

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Site Overview

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Archer, Cathro & Associates,ActiveCMC Metals Ltd., Active

Quartz ClaimsInfrastructure

Figure 3

Weather Station

NOTES:

Projection: UTM Zone 9 NAD83Units: MetersNTS: 105B/07

National Topographic Data Base (NTDB) compiled by Natural Resources Canada at a scale of 1:50,000. Cadastral data compiled by Natural Resources Canada. Reproduced under license from © Her Majesty the Queen in Right of Canada, Department of Natural Resources Canada. All rights reserved.

Quartz claim data obtained from Yukon Government Minerals Branch via http://www.geomaticsyukon.ca/data_download. Data current as of September 15, 2006.

Environmental Assessment Project Spatial Boundary



Additional Reports and Plans

The following plans and reports will be submitted in support of the application as

required:

• ARD Management Plan (see Section 5.1.2);

• Environmental Monitoring Plan (see Section 5.2);

• Detailed Decommissioning and Reclamation Plan (see Section 7.2.5);

• Waste Rock Management Plan (see Section 4.2.4); and

• Environmental Impacts and Mitigation (see Section 7).



4.0 Summary of Proposed Development

4.1 Mining

CMC determined that based on the geological setting, configuration and determined

grades, mining of the TM zone area is best suited for a combination of surface open pit

mining and underground mining. Total pit dimensions are estimated to be 192 m long by

57 m wide and a maximum pit depth of 50 m (see Figures 4-1 to 4-4). The systematic

mining approach consists of prestripping organic duff, stripping the unconsolidated

overburden, excavating waste rock, and removal of the ore down to the 1400 m

(4,600 ft) elevation. The final pit floor will coincide with the current underground

workings and will have exposed openings on the north and south ends of the pit. Once

the pit is completed the underground portion of the ore will be recovered by standard

narrow vein stope mining methods. All run-of-mine ore will be crushed and stockpiled

for mill processing over the year. Figures 4-1, 4-2, 4-3, and 4-4 demonstrate the general

layout of the mine components.

4.1.1 Prestrip Organics

The Silver Hart Property has seen extensive surface disturbance from past owners.

Unfortunately the organic duff material had not been stockpiled for future reclamation of

the site. Therefore, there is no duff material that is available for salvage in the TM pit

area. Mill site and tailings pond disturbance areas will be cleared and organic duff

salvaged for reclamation work. All organic duff material stockpiles will be placed in a

suitable location to minimize erosion loss and documented for future recovery.



4.1.2 Overburden Stripping

During the progressive development of the pit, the unconsolidated overburden material

will be prestripped to expose the bedrock. During the first two years a total of

44,100 bank cubic m (bcm’s) will be removed to allow the waste rock and ore removal.

The overburden consists of silty clay with cobbles and the occasional glacial bolder. The

unconsolidated overburden has demonstrated the capability of natural propagation of

shrubs since the mid-eighties. As the overburden is stripped to expose the rock

interface, it will be used as road base material, tailings dam construction and mill site

grade elevation material. The overburden material can be recovered at the

decommissioning stage to provide unconsolidated material to assist in the recontouring

of the site and allow for natural propagation of shrubs on the exposed rock benches,

waste dump and tailings pond capping. It was observed that the exposed overburden

tends to not be well draining and the lower TM depression in the overburden maintains

water throughout the summer months. Therefore, the overburden material is suitable to

be used for road base construction, mill site grading, construction of the containment

berm for the fueling site, and for tailing pond dam and liner bed material. Table 1

(Overburden Material Placement) shows the anticipated volume removed and the

placement of the overburden material.

Table 1 Overburden Material Placement - Volume in Bank Cubic Meters (bcm)

Source Removal Placement

TM Pit Stripping 44100

Road Base Fill 800

Mill Site Grade Fill 6600

Tailings Dam Fill 30700

Tailings Pond Liner Fill 5800

Fuel Containment Berm 200

Totals 44100 44100



4.1.3 Open Pit and Underground Development Program

The current mine design is a combination of open pit mining and underground operation.

The plan calls for an open pit of approximately 192 m by 57 m and a maximum depth of

approximately 50 m. The open pit mining will continue until the floor elevation reaches

1,400 m elevation. This open pit will tie into the existing underground workings. The

existing underground workings will provide access to the deeper covered ore veins in the

S zone, to the east and the continuation of the TM zone ore veins striking to the

northeast. A small amount of underground development will be required to access the

ore veins and development of stopes. The underground mining will follow a typical

narrow vein cut and fill method. Figure 4-4 (Underground Development Workings)

demonstrates the current underground workings and the proposed workings. Small 3

cyd LHD diesel scoops will tram the ore to the surface where articulated haul trucks will

transport the ore to the mill site area. Jackleg drills will be used to drill and blast the

underground 3 m by 3 m development drifts. Stope on-vein ore mucking will be

conducted by hand in the narrow vein ore bodies and by electric or air slushers for the

wider (+1.0 m width) veins. Stope waste will be moved with electric or air slushers. Any

excess stope waste that cannot be disposed of underground will be removed to the

waste rock site. All new development drifting will be at least a negative 2 percent incline

to allow underground workings to flood at the end of the project life.

As a precautionary measure to mitigate potential metals leaching, a 1 m lift of crushed

limestone will be placed in the floor of the pit plus backfilling of the south underground

opening. This will provide additional buffering for any flow that drains from the pit

through the south adit opening.

4.1.4 Ore Extraction

The ore zone in the TM pit is associated with a fault shear that has allowed replacement

mineralization to occur. Most of the ore can be excavated with a hydraulic excavator

and not require ripping or blasting. Based on the geological sampling, the ore vein

varies in width from 0.61 m to 2.73 m over the length of the proposed pit. Average vein

width for the TM pit is 1.27 m grading 1,099 gm/mt silver, 3.55 % lead, and 3.86 % zinc.

To minimize dilution, an excavator with a 0.60 m wide bucket will remove the ore and

load directly into 30 tonne articulated haul trucks. As the pit is successively mined, the



footwall of the vein develops the footwall of the pit. The excavator will remove the ore in

5.0 m lifts and side cast the waste until the waste removal benching proceeds. The

following section, 4.2.4 describes the waste rock removal process.

Once the ore lift is excavated, the next sequence of waste benching will proceed. The

waste removal will be in 5.0 m lifts. Every second waste lift will coincide with the

highwall bench development. Highwall bench dimensions will be 5.0 m wide and a

height of 10.0 m. The ore and waste sequence will continue until the pit floor is reached,

coinciding with the current underground workings at the 1400 m elevation. To ensure

that the underground workings do not compromise the safety of the workers or

equipment, as the pit floor approaches to within 10.0 m, the waste rock will be drilled and

blasted for a controlled collapse of the underground workings. This will allow the pit

excavation to proceed in a controlled manner.

A pit access road will be constructed on the highwall side of the pit. A maximum grade

of 10 percent will be cut into the benches to allow access to the lower bench levels. A

1.0 m safety berm, on the pit side of the road will be constructed and each pit turning

point will have an emergency run-away. Figures 4-1 to 4-3 are a series of plans

demonstrating the pit limits and progressing bench plans for the TM pit development.

Once the open pit is completed, the pit floor will coincide with the current underground

workings and will have an exposed opening on the northeast and south footwalls. The

exposed underground openings will be utilized to expand the underground workings to

recover in-place ore veins from the TM and S zone. The underground workings will use

the current developed workings in the TM zone, plus will extend the main drift 125 m to

the east to allow the S zone ore to be mined. Narrow vein stope mining techniques will

be used to recover the ore. Development drifts will be standard 3.0 m by 3.0 m

openings. Stope openings will be 1.2 m by 2.4 m and will follow the vein structure over

the 120 m strike length. Stope development will be by typical drill and blast techniques

and with pneumatic jack hammers. Rubber tire load-haul-dump vehicles (LHDs) will be

used to haul the ore to the portal opening where it will be loaded into a dump truck to be

transported to the crushing area. Figure 4-4 shows the pre-stope underground

development.

All ore removed will be trucked to the mill site area 150 m east of the pit, where it will be

crushed and stockpiled for mill processing. All surface run-off will be directed around all



physical workings (mill area, open pit, rock dump, etc.) to settling ponds through the use

or diversion ditches and berms. This will allow suspended solids to settle out and as a

point for monitoring water quality (Figure 5). Mining will be conducted from late spring to

early fall. Based on an annual production of 20,000 tonnes per year, this will allow ore

from the TM zone to be extracted over a three year period. Other exposed mineralized

surface outcrops will be evaluated for the purpose of replenishing the depletion of the

TM zone ore and could lengthen the operational life of the mine.

4.1.5 Technical Data for Proposed Mining Methods

The following Tables 2 and 3 list the design criteria for the proposed mining methods to

be used at the mine site. Mine parameters were based on the current geological rock

types and structures identified by surface and underground geological mapping,

diamond drill holes and surface trenching.

Table 2 Surface Mine Criteria

Item Design Criteria

Minimum Mining Width 0.60 m

Minimum Cut-off Grade 100 gm/tonne Silver

Maximum Pit Depth 50 m

Highwall Bench Width 5.0 m

Highwall Bench Height 10.0 m

Haulage Road Grade 10 percent

Method of Waste Rock Fracturing Ripping and/or Blasting

Pit Strip Ratio 4.2 to 1

TM Pit Recoverable Tonnage 36,150 tonnes

Total Waste Rock Removed 152,047 bcm's



Table 3 Underground Mine Criteria


Development Drift Openings 3.0m X 3.0m

Stope Openings 1.2m X 2.4m

Development Drift Incline -2.00%

Excavation Method Drill and Blast

Ore Tramming Method Diesel LHD

Ventilation Method 2- 1.0m High Volume Fans

Waste Rock Disposal U/G or at the Waste Dump

Minimum Vein Width .08 m

Minimum Dilution Grade 100 gm/tonne Silver

Total Recoverable Ore 27,063 tonnes

4.2 Waste Management

4.2.1 Waste Rock Management

Primary waste rock is expected to be granodiorites and altered granodiorites. Based on

surface exposed waste rock, waste can be dozer ripped to facilitate removal. However,

to provide reasonable excavation of the waste with an excavator, it is anticipated that a

minor amount of blasting of the rock will be required to “fluff” or fracture the waste for

removal. Drilling and blasting on a 5.0 m by 5.0 m grid spacing will provide sufficient

fracturing of the waste rock. Explosive type to be used is ANFO at a powder factor of

0.23 kg/tonne. All waste drilling and blasting will be conducted by contractor services

and eliminate the necessity to establish a powder magazine on site. A total of

152,047 bcm’s (395,322 tonnes) will require removal for the total TM pit. All waste rock

will be disposed at the waste rock site located 150 m to the southwest. Figure 6 (Waste

Rock Site Design) demonstrates the waste site design criteria and area required. Based

on a swell factor of 1.4 and a compaction factor of 1.10, the waste rock generated would

be 193,514 loose cubic m (lcm’s). At the decommissioning stage of the project,

reclaimed overburden material will be used to cap the waste site to minimize the

infiltration of water from the waste site.



There is no infrastructure or natural structures within 500 m of the waste rock site. A

run-on, run-off drainage ditch will perimeter the waste rock site and collect the water in a

settling pond located in the south east corner of the waste rock dump site. This will allow

any developed siltation to settle out. Outflow of the settling pond will be to a natural

surface drainage field to allow the flow to enter the subsurface. Water samples will be

collected and tested for suspended solids and metals from this outflow point.

Based on the proposed mine development a total of 152,047 bcm’s of waste rock will be

removed from the TM pit and the TM/S underground workings. All excess waste rock

will be stockpiled at the waste rock site located at the current waste rock site (see

Figure 5). The rock types associated with the waste will be granodiorites, and andesite

dyke material. Table 4 (Waste Rock Site Design Criteria) lists the parameters used in

the development of the Waste Rock site. The waste rock site is within an area of

extensive bedrock outcropping and shallow unconsolidated overburden and surface

soils. This bedrock provides a stabile foundation for the waste rock storage site.

Table 4 Waste Rock Site Design Criteria


Angle of Repose 35 Degrees

Natural Foundation Grade 18 Percent

Maximum Dump Height 25 m

Maximum Dump Length 145 m

Maximum Dump Width 105 m

Dump Area 1.28 Ha

Designed Capacity 205,000 LCM



4.2.2 Camp Waste

Waste paper, plastic, and kitchen refuse will be bagged and removed weekly to a

designated public landfill site such Swift River or Watson Lake as permitted. Camp

wastes will be disposed of in a permitted septic field to be constructed in 2008. This

septic field will be in the area of the camp, the exact location to be determined based on

a study by an engineer familiar with sewage disposal facility design and construction in

northern climates. If a study of soil suitability indicates that this is not possible a septic

holding tank will be installed. This tank will be pumped by a contractor pumper truck and

disposed of the solid waste at the nearest raw sewage disposal site. Gray water

(washhouse sink, shower, kitchen water) will be held in a sump and allowed to infiltrate

and evaporate.

4.2.3 Contaminated Soils

While every step will be made to prevent spills from occurring should any spills happen

the contaminated soils or special waste generated will be excavated and moved to a

permitted land treatment facility or other permitted disposal site, following the Yukon

Environment Act Contaminated Sites Regulation and Protocols For the Contaminated

Sites Regulation under the Environment Act.

4.3 Mill Operations and Tailings Management

4.3.1 Mill Operations

The mill site facilities will include both comminution and concentration of the raw ore.

The comminution process involves crushing the raw ore through a series of crushers

until a feed product of <12.5 mm material is achieved for the ball mill feed. The

comminution process will start with the raw ore stockpile feeding over a grizzly separator

with 600 mm bar spacing to separate oversize material before feeding into the primary

jaw crusher. A primary jaw crusher will reduce the raw ore to a minimum size of

<150 mm. The product from the jaw crusher will then be fed over a vibrating screen

deck to screen fines (<12.5 mm) to bypass the secondary crusher. Oversize screenings

will then be fed into the secondary crusher to crush the ore to -12.5 mm size. Due to the



comminution process occurring on a seasonal basis with mining, all -12.5 mm crushed

product will be stockpiled on a lined and bermed storage area. The ore storage area will

utilize an impermeable geotextile or poly liner to prevent potential contamination of the

surrounding soils and groundwater. The crushed ore will also be covered with tarps to

minimize moisture infiltration into the crushed ore stockpile. Figure 7 (Crusher Circuit

Layout) demonstrates a typical comminution layout for the mill site area.

For the concentration processing of the crushed ore, a ball mill will grind the crushed raw

ore to a particle size of 100 mesh (150 microns). A hydrocyclone will classify the

material to ensure proper grinding. Oversized material will be recirculated back to the

ball mill for further grinding. The undersized material will be conditioned with industry

standard reagents to prepare for the floatation recovery of silver, lead, and zinc. Table 5

lists the reagents and conditioners used in the concentration process and the estimated

amount consumed based on metallurgical testing.

The primary flotation rougher will first concentrate the sulfide ores in two flotation cells; a

second rougher circuit will concentrate the oxide portion of the ores. A cleaner flotation

circuit will upgrade the rougher concentrate to a grade that meets the requirements for

shipment to a smelter and refiner. Silver/lead flotation concentrates are further

processed to extract the majority of the silver into a silver electrolyte.

The silver electrolyte is passed through an electrowinning (EW) cell to remove the silver.

The 99.9 percent pure silver is removed from the EW cell plates and melted in a melt pot

to pour silver ingots or left as sheets for shipping to a refinery. The refiner will further

upgrade the silver content to 99.99 percent silver to meet commodity market grade for

sales.



All concentrates will be dewatered with a filter press and dried to less than 10 percent

moisture. Concentrates will then be loaded into 5 tonne polywoven ore bags for

shipment to various smelters depending on the concentrate type and grade. Estimated

mill head grades with mining dilution are 1099 gm/tonne silver, 3.86% zinc, and

3.55% lead. Annual concentrate production is estimate to be 20,235 kg of silver ingots

at 99.9% silver, 827.4 tonnes of lead/zinc/silver sulphide concentrate grading 52.0%

lead, 44.8% zinc and 1025 gm/tonne silver, and 800.6 tonnes of lead/zinc/silver oxide

concentrate grading 32.3% lead, 30.9% zinc and 270 gm/tonne silver. Based on the

SGS Lakefield Laboratories Ltd. metallurgical test results, metal recoveries from the raw

ore are 96.9% silver, 97.0% lead, and 80.0% zinc. Figure 8 (Mill Flow Diagram) is a

typical flow diagram for the concentration mill being proposed.

Table 5 Milling Reagents and Conditioners - Concentration (gm.tonne)

Circuit Reagents

Na2CO3 Lime A31 SIPX NaHS 407 MIBC

Grind 1500

PbS Condition 31

PbS Rougher 1 10 10

PbS Rougher 2 40 20 10

PbO Condition 1885

PbO Rougher 1 2855 40 1000 60

PbO Rougher 2 40 1000 60

PbO Rougher 3 40 60

Subtotal 4355 1885 71 150 2000 180 20

Annual Consumption (tonnes) 87.1 37.7 1.4 3.0 40.0 3.6 0.4



4.3.2 Materials Balance

Figure 9 (Mill Materials and Water Balance) shows the mill materials and water balance

for the proposed mill facilities.

4.3.3 Personnel

Milling will be conducted on a year round basis with two 12 hour shifts per day, with a

work rotation of 14 days on, 14 days off. Table 6 (Manpower Requirements) outlines the

anticipated Manpower schedule required for the milling process. Both mining and

transportation of the concentrate will be on a contract basis. Priority for employment will

be from the Teslin and Watson Lake communities first when possible, then from within

the Yukon, and then from outside the Territory. Upon commissioning of the mill,

standard operating health and safety and environmental protocols will be undertaken to

maximize the value of the manpower resources.



Table 6 Manpower Requirements

Days Days Number Number Number Total

Management On Off Per Shift of Shifts of Rotations Required

Mine/Mill Manager 5 2 1 1 1 1

Grade Control Technologist 14 14 1 2 2 4

Subtotal- 5

Mill Positions

Mill Maintenance 14 14 1 1 2 2

Mill Labours 14 14 2 2 2 8

Equipment Operators 14 14 1 2 2 4

Subtotal- 14

Support Positions

Cook/Medic 14 14 1 2 2 4

General Camp Maintenance 14 14 1 1 2 2

Subtotal- 6

Totals- 25

Mine Positions*

Mine Supervisor/ Mechanic 5 2 1 1 1 1

Excavator Operator 5 2 1 1 1 1

Truck Operator 5 2 2 1 1 2

Crusher Operator 5 2 2 1 1 2



4.3.4 Tailings Management

Based on current metallurgical tests performed by SGS Lakefield Laboratories Ltd. and

the detailed mine dilution analysis, 91.8 percent of the ore by weight is residual tailings.

Current recoverable ore in the TM zone area for the surface and underground mining to

the 1400 m level is estimated to be 63,213 tonnes with an average grade of 1099

gm/tonne silver, 3.86% zinc, and 3.55% lead. Estimated tailings produced will be 58,030

tonnes or 24,589 m3 of solidified tailings volume. Average tailings grade estimated to be

37 gm/tonne silver, 0.84% zinc, and 0.12% lead. The proposed tailings pond has a

potential volume capacity of 39,500 m3. The tailings pond will utilize the additional

capacity for adit water retention, settling capacity, and for any additional resources that

may be discovered and processed.

The tailings berm construction is a typical tailings retention type dam constructed from

overburden fill with a coarse rock center core. First the brush and vegetative mat

material is removed from the tailings area in preparation of the retention berm

construction. The vegetative duff is stockpiled for reclaiming the tailings pond at the

decommissioning phase of the site. A 1.5 m high coarse rock drainage core is placed at

the center of the berm to assist in the elimination of any potential hydrostatic pressure

build-up. Overburden fill that is removed from the TM pit boundary and at the

surrounding tailings pond area, is placed in 0.30 m lifts on both side of the center coarse

rock fill. Successive 0.30 m lifts will continue until the first 1.5 m coarse rock level is

reached. Another 1.5 m coarse rock core lift is placed and the overburden placement

sequence is repeated. A geosynthetic liner is placed over the tailings storage area to

minimize the potential of exfiltration and seepage from the tailings material. Protective

bedding sand is installed above and below the liner to prevent punctures. The

downstream and upstream faces of the tailings dam will have a minimum 1.0 m coarse

rock fill to eliminate the potential of erosion effects (a decant culvert and a return tailings

water line will be installed to allow for the reuse of the tailings water for the milling

process). A 0.50 m freeboard level is maintained to eliminate topping of the berm and

erosion from wave action. The tailings pond design criteria are outlined in Table 7. At

the decommissioning of the tailings pond an overburden cap will be installed to minimize

water infiltration into the tailings material and provide a base for the replacement of the

vegetative mat material. Required area for the tailings berm and pond is 0.89 hectares.



Figure 10 (Tailings Dam Cross Section) demonstrates the construction cross section of

the tailings dam.

A drainage ditch is located to the north of the pond area to direct any run-on flow into a

downstream settling pond. A water decant system is installed to allow reuse of the

tailings water for the milling process. This will assist in minimizing the amount of make-

up water required to process the ore through the facilities. For emergency water

spillage, an overflow drainage ditch is located on the north corner of the berm to allow a

controlled spill during the event of an excessive rain fall. All outflow from the filter

drainage zone and emergency spillage is directed to a settling pond to allow retention

time for sediments to settle. Outflow from the settling pond will be visually monitored on

a weekly basis and quarterly water samples taken for analysis of Total Dissolved Solids,

Total Suspended Solids, turbidity, hardness, pH, conductivity, and total and dissolved

metals.

Table 7 Tailings Pond Design Criteria


Maximum Dam Height 7.0 m

Crest Width 4.0 m

Crest Length 175.3 m

Downstream Slope 2:1

Upstream Slope 2:1

Rock Core Width 1.0 m

Number of Toe Drains 6

Slope Face Rock Cover 1.0 m



4.4 Summary of Project Water Use and Water Management

4.4.1 Water Use

A water well will be drilled for camp water use and for any excess water requirements of

the mill. There is currently a small amount of water flowing from the existing adit and the

current plan is for this water to be used, where practical, in the milling process along with

water flow from the tailings decant. Any water requirements above this will be drawn

from the water well to be drilled in 2008. Water use requirements for personnel are

estimated to be 200 L per day per person for drinking, washroom use, showering,

laundry and kitchen use. Therefore, depending on the crew size onsite, the estimated

water consumption for personal use is 5.0 m3/day during construction, 4.0 m3/day during

mining/milling, and 2.6 m3/day during milling. In addition to the personal water

consumption, make-up water for the mill will consume an estimated 44.8 m3/day when a

static state in recycled tailings water is reached. Table 8 (Water Consumption) lists the

water requirements over the project life. Potable water will be trucked to the site from

the nearest available source of potable water and held in a cistern as required. Bottled

(19.8 L) potable water stands will also be available at locations for drinking water. The

water well will be in the vicinity of the camp if possible. For consideration of the water

use licence the total water to be used will be approximately 48.8m3/day, with an

emergency additional 20% is approximately 60m3/day.

Table 8 Water Consumption (m3/day)

Item Source Consumption

Well/Adit Water 48.8Tailings Decant Water 77.2

Potable Water 0.1

Concentrate Dryer Evaporation 1.3

Tailings Retained Water 42.8

Tailings Decant Water 77.2

Concentrate Retained Moisture 0.7

Potable Water 0.1

Camp Facilities 4.0

Subtotal- 126.1 126.1